A bank's ability to earn money affects its safety and soundness. Earnings may be retained by the bank, boosting its capital buffer, or be used to deal with problematic loans, likely making the bank better prepared to withstand financial trouble. Conversely, losses take away from a bank's ability to do those things.
The Yoakum National Bank scored 20 out of a possible 30 on Bankrate's earnings test, better than the national average of 16.52.
Return on equity, calculated by dividing net income (profit, basically) by the total amount of equity, is one widely used measure of a bank's earnings. The most recent annualized quarterly return on equity for The Yoakum National Bank was 10.71 percent, above the national average of 9.28 percent.
The bank reported net income of $1.5 million on total equity of $29.7 million for the twelve months ended June 30, 2017. The bank had an annualized return on average assets, or ROA, of 1.41 percent, above the 1 percent deemed satisfactory in accordance with industry standards, and above the average for U.S. banks of 1.14 percent.